Canada Post Corporation Act Library Materials Review Report—April 2022
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Introduction/Overview
Purpose of the review
On June 19, 2013, an Act to amend the Canada Post Corporation Act (library materials) (S.C. 2013, c.10), received royal assent. It provided a definition of library materials (section 2), granted Canada Post the authority to regulate reduced rates of postage for library materials lent by a library to a borrower, including by way of an interlibrary loan (section 19(1)(g.1)), and granted Canada Post the authority to enter into an agreement with the Government of Canada to continue the reduced rate of postage for library books (section 21.1). The purpose of this review is to fulfill the minister’s obligation to undertake a review of the definition of library material and the operation of section 19(1)(g.1) pursuant to the Canada Post Corporation Act (R.S.C., 1985, c. C-10).
Background on Canada Post Corporation
Canada Post was established as a federal Crown corporation in 1981. Prior to this, it operated as a federal department that received annual government funding. Under the Canada Post Corporation Act, the corporation is mandated to provide a standard of service that meets the needs of Canadians while conducting its operations on a self-sustaining financial basis. Canada Post does not receive any federal funding with the exception of $22.2M annually to help offset the financial impact of free mailing of material for the use of the blindFootnote 1, and Government Mail Free of Postage.
On January 24, 2018, as a result of a 2-phase review of Canada Post that took into consideration the views of Canadians from coast to coast to coast, the government announced a service-focused vision for renewal:
- Canada Post will provide high-quality service at a reasonable price to Canadians, no matter where they live
- it will adapt to meet challenges and take advantage of opportunities created by demographic change, new technologies, and evolving expectations of its customers
- as a valued Canadian enterprise that will serve our country for decades to come, Canada Post must be efficient and financially sustainable for the long term, generating revenues that support current and future services, and enable ongoing innovations
Background on library materials
Historical context
Public libraries in Canada are governed by provincial/territorial statutes and are primarily financed by municipal tax revenues and other local income, with provincial grants supplementing local fundingFootnote 2.
Originally, the library book rate was a discounted postal rate that provided access to library books to people who may not otherwise have access to themFootnote 3. It was a special rate for libraries to ship books and other printed library matter to each other (such as interlibrary loan) and to readers.
The library book rate was part of the Publications Assistance Program (PAP) and its predecessors. Although responsibility for the general policy on the PAP subsidies was with various departments over the years, program administration was with Canada PostFootnote 4. One of the objectives of the PAP was “to provide access to those readers who, due to their geographic location, or physical limitation, do not have access to a public library by supporting the distribution of library books to such readers.”
In 1998, the PAP was changed to comply with a World Trade Organization ruling on the program. Canada Post entered into an agreement with the Department of Canadian Heritage for the delivery of the new PAP. As part of this agreement, Canada Post agreed to extend the subsidized rates to libraries. The agreement was renewed several times with the last one expiring March 31, 2006.
On December 13, 2006, the minister responsible for Canada Post directed Canada Post to continue its annual $15M financial contribution to the PAP until March 31, 2009Footnote 5. There was no increase in the library rook rate until Canada Post, the Canadian Library Association (CLA) and Association pour l’avancement des sciences et des techniques de la documentation jointly issued a press release in November 2011 announcing a weighted average increase in the library book rate of 5% effective January 16, 2012. This was the first rate increase since 2005.
In its December 2008 reportFootnote 6, the Independent Advisory Panel reviewing Canada Post indicated that it was unable to determine which federal department had clear program responsibility for the Library Book Rate Program. The panel recommended that Canada Post should not be required to subsidize or otherwise pay for public policy objectives, including the library book rate, that were not part of its universal service obligation. It recommended that “Canada Post deal with the library book rate on a “single large-volume customer basis” to give libraries appropriate volume and other commercial discounts as are available to large-volume commercial customers.” The government did not make any statements related to this recommendation.
Amendments to the Canada Post Corporation Act (R.S.C., 1985, c. C-10)
Bill C-322 an Act to amend the Canada Post Corporation Act (library materials) was introduced on February 25, 2009. It did not proceed beyond this point. In the next session of parliament it was re-introduced as Bill C-509 on April 14, 2010. This bill passed through the house and was in the Senate when parliament was prorogued.
Bill C-321, an Act to amend the Canada Post Corporation Act (library materials), was introduced on October 4, 2011. It was essentially the same as Bills C-322 and C-509. Bill C-321 received royal assent on June 19, 2013.
As a result of the passage of Bill C-321, library materials are defined in the Canada Post Corporation Act, as “books, magazines, records, compact disk (CD)s, compact-disk read-only memory (CD-ROM)s, audiocassettes, videocassettes, digital versatile disk (DVD)s and other audiovisual materials and other similar library materials” (s. 2(1) of the Canada Post Corporation ActFootnote 7). Prior to this bill, the library book rate had applied to printed library matter only so a broader range of material became eligible for the reduced postage rate. The amendment also provides Canada Post with the authority to regulate reduced rates of postage for library materials lent by a library to a borrower, including by way of an interlibrary loan (Canada Post Corporation Act section 19(1)(g.1)). The other resulting change is Canada Post, with the approval of the Governor in Council, has the authority to enter into an agreement with the Government of Canada to continue the reduced rate of postage for library books (s 21.1 of the Canada Post Corporation Act).
Current status
Today, Canada Post’s library materialsFootnote 8 offering is a service accessible to recognized public libraries, university libraries, and libraries maintained by non-profit organizations or associations for public use in Canada. Libraries that operate as a commercial enterprise or that restricts its membership to a specific group of patrons are not eligible for the library materials service. The service includes delivery tracking and confirmation, return postage paid and return to sender. The postage paid includes both the outgoing shipping and the return of the books.
Canada Post’s processing of library materials is the same as regular domestic parcels including delivery service standards the same as a regular parcel, such as up to 3 days local (within a city or town), up to 6 days regional and up to 10 days national.
To access the library materials service, a library must first fill out an application form and be authorized by the Canadian Urban Library Council (CULC). The CULC is responsible for confirming that the applicant meets the eligibility requirements. Once authorized by the CULC, the library gets access to the library materials service prices and the library shipping toolFootnote 9. This tool enables users to prepare and pay for their library material shipments.
Library stakeholders
There are 2 main associations representing libraries across Canada, the Canadian Federation of Library Associations (CFLA)Footnote 10 and the Canadian Urban Libraries CouncilFootnote 11.
The CFLA was incorporated in 2016 and replaced the Canadian Library Association. It is a federation of 25 associations that represent public libraries, school libraries, law libraries, research libraries, and health libraries among others. Its mission is to be the united voice of Canada’s libraries.
The CULC was formally incorporated in 2008. Its members are the 48 largest public library systems in Canada, along with Library and Archives Canada and the Bibliothèque et Archives nationales du Québec. Its mission is to “facilitate advocacy, collaboration, and research that strengthens and promotes the value of Canada’s urban libraries as integral to a vibrant democracy, a strong economy, and thriving communities”.
The associations believe the Canada Post Corporation Act definition of library material continues to be appropriate. They noted that advances in technology are enabling devices with pre-loaded reading material for those with print disabilities. However, the shipment of these devices is covered through other programs provided through the Centre for Equitable Library Access and the National Network for Equitable Library Service so they do not believe that they need to be added to the definition in the Canada Post Corporation Act.
As all of their members are publicly funded or not-for-profit with limited budgets, lower postal rate increases would always be welcome. However, the associations are also of the view that the library material rates are “on the right side of fair” especially when factoring in Canada Post’s ability to pick up and deliver everywhere in Canada.
Analysis
Library materials are defined in the Canada Post Corporation Act, as “books, magazines, records, CDs, CD-ROMs, audiocassettes, videocassettes, DVDs and other audiovisual materials and other similar library materials”. Technology has continued to evolve since 2013, when the definition of library materials came into effect (for example, increased accessibility of cloud technology for the storage and sharing of information, and 3D print technology). However, the evolution of e-books is the most relevant technological advancement. By definition, e-books are not something that would be shipped between libraries via Canada Post. As noted by the library associations, advances in technology are also enabling devices with pre-loaded reading material for those with print disabilities.
Under the Canada Post Corporation Act, Canada Post has the authority, with the approval of the Governor in Council, to make a number of postal related regulations. It is under this authority that Canada Post sets not only rates for the basic letter and international mail, but also for standards for postal meters used by businesses in lieu of stamps, and mail boxes on streets and in apartment buildings. However, Canada Post has not exercised all of its authority to set regulations. It has not set regulations for rates for library materials, refunding of postage, the closure of post offices, the termination of rural routes or the termination of letter carrier routes.
The process for setting a regulation is outlined in section 20 of the Canada Post Corporation Act. The process requires Canada Post to publish the draft regulation in the Canada Gazette and the public is to be given reasonable opportunity to provide their comments to the minister. The regulation must be approved by the Governor in Council before it can take effect. However, section 21 of the Canada Post Corporation Act allows Canada Post to enter into agreements with users for postage rates that vary from set rates whether they are regulated or unregulated. Canada Post has used this authority to enter into an agreement with the Canadian Urban Library Council on behalf of all eligible libraries, not just its members, for a reduced rate of postage for library materials.
Rates were unchanged from 2005 to 2012. Since 2012, the weighted average increase has been 5% per year.
| Rate code | 1 | 2 | 3 | 4 | 5 |
|---|---|---|---|---|---|
| Per piece | $1.16 | $1.98 | $1.98 | $2.98 | $2.98 |
| Per kilogram | $0.22 | $0.32 | $0.32 | $1.19 | $1.19 |
Rate codes
- Posting at an office with a postal code that has the same first letter as the postal code of the office of delivery, such as within one of Canada Post’s 18 major geographic areas, provinces or districts
- Posting at an office, for delivery to an office that is within the same province but does not have the same first letter in their respective postal codes, such as within Ontario or Quebec
- Posting at an office in an area identified by the first letter of the postal code, for delivery to an office in an adjoining area, as is identified by the first letter of the postal code
- Posting at an office or in the Yukon Territories, for delivery to another office in the Northwest Territories or Nunavut
- Posting at an office for delivery to another office that is other than the one described in items 1, 2, 3, and 4
According to Canada Post, approximately 90% of the library materials shipped are within a province or territory, such as qualify for rate codes 1 or 2.
As a result of the COVID-19 pandemic, the volume of library material shipments decreased in 2020. As libraries fall under provincial jurisdiction, libraries were subject to the various provincial public health protocols that were put in place in response to the COVID-19 pandemic. Protocols included total closure for periods of time or limited openings to support social distancing strategies. Library materials were subject to 72 hour quarantine and so interlibrary loans were extremely limited.
| Annual reportstable 2 note 1 | Volumetable 2 note 2 | Revenue | Average revenue per piecetable 2 note 3 |
|---|---|---|---|
| 2009 | 713,000.00 | $772,000.00 | $1.08 |
| 2010 | 775,000.00 | $842,000.00 | $1.09 |
| 2011 | 750,000.00 | $831,000.00 | $1.11 |
| 2012 | 747,000.00 | $857,000.00 | $1.15 |
| 2013 | 735,000.00 | $880,000.00 | $1.20 |
| Canada Posttable 2 note 4 | Not applicable (N/A) | N/A | N/A |
| 2014 | 738,000.00 | $922,000.00 | $1.25 |
| 2015 | 763,000.00 | $989,000.00 | $1.30 |
| 2016 | 757,000.00 | $1,031,000.00 | $1.36 |
| 2017 | 769,000.00 | $1,089,000.00 | $1.42 |
| 2018 | 790,000.00 | $1,172,000.00 | $1.48 |
| 2019 | 858,000.00 | $1,328,000.00 | $1.55 |
| 2020 | 517,000.00 | $808,000.00 | $1.56 |
Table 2 Notes
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Library material shipments make up an extremely small portion (1% or less) of Canada Post’s domestic parcels business. In 2019, prior to the pandemic, there were 858K library material pieces shipped generating $1.3M in revenues compared to Canada Post’s 222M domestic parcels generating $2.1B in revenues. Over the last 10 years, the average revenue per piece for a library shipment (outbound and return) was $1.29 compared to $9.07 for domestic parcels, or 85% less. It should be noted that the rate for a library shipment covers both the sending and return of the material whereas the regular parcel rate is for sending only.
Findings
The Canada Post Corporation Act definition of library materials continues to meet current needs for reading materials to ensure Canadians continue to have access to these materials. Technology has continued to evolve since 2013, when the definition of library materials came into effect, with e-books being the most relevant. By definition, e-books are not something that would be shipped between libraries via Canada Post. The shipment of devices for those with print disabilities is covered through other federally funded programs.
Section 19(1)(g.1) grants Canada Post the authority, with the approval of the Governor in Council, to make a regulation for reduced rates of postage for library materials lent by a library to a borrower, including by way of an interlibrary loan. The section does not obligate Canada Post to make such a regulation. Canada Post has used its authority under section 21 of the Canada Post Corporation Act to enter into an agreement with the Canadian Urban Library Council, on behalf of all eligible libraries, for a reduced rate of postage for library materials. So although section 19(1)(g.1) has not been exercised, the intent of having a reduced rate for library materials is being achieved.
Conclusion
The purpose of this review was to fulfill the minister’s obligation to undertake a review of the definition of library material and the operation of Canada Post Corporation Act section 19(1)(g.1). The definition continues to be appropriate and section 19(1)(g.1) continues to be an option for Canada Post to use to set rates for its library materials service.
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